Banks face 'record' PPI complaints

 

Payment protection insurance (PPI) complaints are on course to more than double the record number already predicted for this year, the ombudsman service has said.

The Financial Ombudsman Service (FOS) has already received nearly 100,000 PPI complaints in the first six months of this financial year and warned that consumers would only face longer waits for justice if banks failed to clear up complaints quickly and fairly.

The flood of complaints to the ombudsman has also shown a dramatic increase, with 66,882 new complaints made about PPI between July and September, more than double the 32,445 complaints received in the first quarter of this year.

A spokesman for the FOS said that with 1,500 new complaints a day and well over 3,000 new telephone inquiries a day as well, it looked "likely" that the ombudsman would see more than double the 165,000 cases that it had originally anticipated.

The service said it had built enough flexibility in its budget to sort out far more cases than the original estimate, but even so, this left the watchdog tackling much higher complaint volumes.

Natalie Ceeney, chief ombudsman, said: "The mis-sale of PPI is by far the biggest mis-selling scandal we've ever seen.

"As the banks face up to record levels of complaints, the ombudsman has geared up to deal with the ever-increasing fallout that consumers are facing.

"But with the ombudsman receiving 100,000 PPI complaints in the last six months alone, it's clear that unless the banks sort out their complaints quickly and fairly, consumers will only face longer waits for justice."

Around £10 billion has been set aside by the banks to cover claims being made by people who were sold insurance they did not want or need, but some consumer groups have raised concerns that even this could not be enough to cover the scale of the problem.

PPI policies were meant to help people pay back their loans after a loss of income, but a widespread mis-selling scandal emerged, with some people finding they had taken out the insurance without realising it or felt under pressure to do so.

The FOS previously criticised banks and insurers for subjecting customers to "delays and inconvenience", despite a legal challenge to PPI complaints being dropped last year.

Some 68% of these complaints were upheld by the ombudsman service in consumers' favour in the latest quarter, a similar level to the 69% upheld between April and June.

The average compensation payout is £2,750, although the figure can vary considerably.

The ombudsman service has received a total of 450,000 complaints from people about PPI since 2001.

It said that in the last financial year, only a very small proportion (2.5%) of PPI complaints turned out to be bogus, where no policy had ever existed, and these cases were largely brought by claims management companies (CMCs), which typically take a quarter of any payout.

It also said that in around one quarter of all the cases it saw where banks told the ombudsman that no PPI policy ever existed, the ombudsman later found out that it did.

Figures released last month by the City watchdog showed a similar surge in PPI complaints made to financial services firms in recent months.

There were more than 2.2 million PPI complaints in the first half of this year, the Financial Services Authority (FSA) said previously, the highest six-monthly figure it has ever recorded.

Consumer group Which? has been leading a Big Change campaign to later banks' culture.

Which? chief executive Peter Vicary-Smith said: "The banks must set aside more money for PPI claims and make it easier for customers to get back what they are rightly owed, without any hassle.

"Consumers are continually being short-changed by the banks. We're campaigning for Big Change in the culture of banking to put customers first, not bankers and protect the public suffering from further mis-selling and scandals."

PA

Suggested Topics
Voices
The Sumatran tiger, endemic to the Indonesian island of Sumatra, is an endangered species
voicesJonathon Porritt: The wild tiger population is thought to have dropped by 97 per cent since 1900
Arts and Entertainment
Beast would strip to his underpants and take to the stage with a slogan scrawled on his bare chest whilst fans shouted “you fat bastard” at him
musicIndie music promoter was was a feature at Carter gigs
News
news
Arts and Entertainment
Story line: Susanoo slays the Yamata no Orochi serpent in the Japanese version of a myth dating back 40,000 years
arts + entsApplying the theory of evolution to the world's many mythologies
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Performers dressed as Tunnocks chocolate teacakes, a renowned Scottish confectionary, perform during the opening ceremony of the 2014 Commonwealth Games at Celtic Park in Glasgow on July 23, 2014.
news
Life and Style
Popular plonk: Lambrusco is selling strong
Food + drinkNaff Seventies corner-shop staple is this year's Aperol Spritz
News
Gardai wait for the naked man, who had gone for a skinny dip in Belfast Lough
newsTwo skinny dippers threatened with inclusion on sex offenders’ register as naturists criminalised
News
Shake down: Michelle and Barack Obama bump knuckles before an election night rally in Minnesota in 2008, the 'Washington Post' called it 'the fist bump heard round the world'
newsThe pound, a.k.a. the dap, greatly improves hygiene
Arts and Entertainment
La Roux
music
Arts and Entertainment
Graham Fellows as John Shuttleworth
comedySean O'Grady joins Graham Fellows down his local Spar
News
people
News
Ross Burden pictured in 2002
people
News
Elisabeth Murdoch: The 44-year-old said she felt a responsibility to 'stand up and be counted’'
media... says Rupert Murdoch
Arts and Entertainment
tv
Extras
indybest
Sport
Arsenal signing Calum Chambers
sportGunners complete £16m transfer of Southampton youngster
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Junior / Graduate Application Support Engineer

£26000 per annum: Ashdown Group: A highly successful international media organ...

QA Manager - North Manchester - Nuclear & MOD - £40k+

£35000 - £41000 per annum + competitive: Progressive Recruitment: QA Manager -...

Property Finance Partner

Very Competitive Salary: Austen Lloyd: LONDON - BANKING / PROPERTY FINANCE - ...

Agile Tester

£28000 - £30000 per annum + competitive: Progressive Recruitment: An ambitious...

Day In a Page

The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
Countries that don’t survey their tigers risk losing them altogether

Countries that don’t survey their tigers risk losing them

Jonathon Porritt sounds the alarm
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz
A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on